Criminal Taxes Unit
Criminal prosecution is the ultimate weapon in HMRC’s armoury. And all HMRC prosecution cases are handled by their Criminal Taxes Unit, a branch of its Fraud Investigation Service. If HMRC are successful in obtaining a conviction the result can be: a jail; costs awards; Confiscation Orders; publication of details; a criminal record. Frequently conviction leads to the withdrawal of credit; loss of confidence from suppliers and customers - resulting in business collapse; mental strain; damage to, and often breakup, of personal relationships.
HM Revenue and Customs have complete discretion to conduct a Criminal Investigation in any case involving tax fraud. Prosecutions normally take place when: HMRC feels it needs to send a “strong deterrent message”, or that the case is so serious (aka “heinous”) that only a criminal sanction is appropriate; and in cases where the tax investigators are not confident in the quality of the disclosures being made. Tax prosecutions are handled by the HMRC Criminal Taxes Unit (CTU).
The CTU is a branch of HMRC's Fraud Investigation Service. Most prosecution cases don't start off with the CTU. Many begin life as civil tax evasion or tax avoidance investigations. It’s HMRC general policy to deal with suspected Serious Tax Fraud and Evasion by use of the Contractual Disclosure Facility Code of Practice 9 ("HMRC investigations where we suspect tax fraud") procedures. Tax avoidance is frequently investigated by FIS using HMRC Code of Practice 8. These are handled by the civil investigation teams in the Fraud Investigation Service. FIS investigates and gathers evidence: but in certain circumstances will refer the case to the Criminal Taxes Unit - to commence formal proceedings under the Police And Criminal Evidence Act (PACE).
HMRC has published its prosecution policy. It will generally consider Criminal, rather than Civil investigations in the following situations, amongst others:
- Where materially false statements are made or materially false documents are provided in the course of a civil tax investigation;
- Where, pursuing a tax avoidance scheme, reliance is placed on a false or altered document or such reliance or material facts are misrepresented to enhance the credibility of a scheme;
- Where deliberate concealment, deception, conspiracy or corruption is suspected;
- In cases involving the use of false or forged documents;
- Where the perpetrator has committed previous offences; or there is a repeated course of unlawful conduct; or previous civil action (resulting in penalties for deliberate errors);
- Where an individual holds a position of trust or responsibility (such as an accountant)..
Where a taxpayer is investigated using the Contractual Disclosure Facility but either: denies committing tax fraud; or fails to fully co-operate; or makes materially false disclosures; then HMRC will often feel they have no alternative but to prosecute.
Criminal Tax Investigations can involve the full use of Police and Criminal Evidence Act (PACE) powers e.g.: surveillance; interviews under caution; searches of homes, business premises and even persons - accompanied by uniformed police - and possibly involving seizure of cash; computers; business and personal financial records; and other assets; formal arrest; charging with offences such as Common Cheat; detention without bail; passport surrender; fingerprinting and mugshots; public court appearances; Confiscation Orders; and custodial prison sentences. They can be highly stressful and very costly: often leading to business failure; the loss of savings and assets; and relationship breakdowns.
How can Lynam Tax Investigation Specialists help if I'm worried about prosecution?
Lynam Tax has a long history of successfully helping clients avert prosecution for tax offences, and of persuading HMRC to drop Criminal Prosecutions, in favour of Civil Tax Investigations. Where HMRC do pursue a Criminal Investigation then, as highly skilled forensic accountants, we are greatly experienced in working closely with specialist defending solicitors; and in the preparation and checking of evidence bundles and HMRC analyses and calculations: which can frequently lead to: large reductions in sentences (including obtaining suspended sentences); substantial reductions in the sums the taxman seeks to recover by way of Confiscation Orders; and in many cases to charges being dropped completely.
For a free and totally confidential discussion,
Call Paul Lynam now: on 0845 643 9997
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